Dow Chemical and DuPont said on Friday that they will merge to create the world’s biggest chemical company. The all-stock deal would create a merged company valued at $130 billion.
Dow Chemical and DuPont said on Friday that they will merge to create the world’s biggest chemical company. The all-stock deal would create a merged company valued at $130 billion.
The new group will be split into three separate entities: agriculture, specialty chemicals and materials, they said.
DuPont said it will cut staff by 10 per cent following the merger. Dow chief executive Andrew Liveris will become executive chairman of the new company, DowDuPont, while DuPont’s CEO Ed Breen will be his CEO.
“This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” Mr Liveris said in a statement.
The statement added that the transaction was expected to produce run-rate cost synergies of around $3 billion and approximately $1 billion in growth synergies.
“This merger of equals will create significant near-term value through substantial cost synergies and additional upside from growth synergies,” said Mr Breen.
The merger comes on the heels of activist campaigns launched by Trian’s Nelson Peltz at DuPont and Third Point’s Daniel Loeb at Dow that prompted earlier moves to spin off low-return divisions and boost shareholder payouts.
